Two Serra Nissan Managers And Three Salesmen Charged In Loan Fraud Conspiracy
For Immediate Release
U.S. Attorney's Office, Northern District of Alabama
BIRMINGHAM -- A third sales manager, a finance manager, and three salesmen who work, or previously worked at Serra Nissan face federal charges in connection with a conspiracy at the Birmingham car dealership to fraudulently boost loan approvals and car sales, announced U.S. Attorney Joyce White Vance, IRS Criminal Investigation Special Agent in Charge Veronica Hyman-Pillot, and FBI Special Agent in Charge Richard D. Schwein Jr.
A federal grand jury last week indicted D. SCOTT BURTON, 36, of Odenville, MICHAEL J. WILKINSON, 56, of Moody, DWIGHT A. PERRY, 44, of Birmingham, TERRY W. HENDERSON, JR., 39, of Pleasant Grove, and ROLAND W. RILEY, 28, of Birmingham, on conspiracy, bank fraud, wire fraud, and aggravated identity theft charges. A federal judge unsealed the indictment after the defendants were arrested today and appeared in court.
"As managers and salesmen in a car dealership, these defendants falsified customer information used to make loans, defrauding the banks who trusted the dealership to present truthful information during the vehicle financing process, and harming customers by fraudulently inflating the value of the vehicles they purchased," she said. "This type of fraud is the auto-industry equivalent of the mortgage fraud that contributed to the financial meltdown, and could threaten the security of our financial markets," Vance said.
"Today's arrest clearly illustrates that individuals who engage in these types of illegal activities will be held accountable for their actions," Hyman-Pillot said. "These defendants clearly took advantage of the people in their community, as well as financial institutions. They manipulated the system and falsified documents with the intention of increasing profits at the expense of others."
“This case is significant to the FBI not merely because of the loss amounts, but also because of the many victims left in the wake of this scheme who had trusted the defendants with handling their vehicle financing,” Schwein said
The 11-count indictment charges the defendants with conspiring with others at the dealership, between August 2010 and October 2013, to defraud financial institutions, Nissan North America and Serra Nissan customers by fraudulently increasing vehicle sales in order to boost personal profits.
The indictment also charges Wilkinson, Burton, Perry and Riley with bank fraud for fraudulent loan information submitted to financial institutions in October 2012. Defendants Wilkinson, Perry and Henderson also are charged with wire fraud for fraudulent information submitted to automotive financing companies such as Nissan Motor Acceptance Corporation and Santander Consumer USA.
The final count of the indictment charges Perry and Henderson with aggravated identity theft for the unlawful use of a customer's Alabama-issued personal identification card during the commission of the bank and wire fraud, and the conspiracy to commit those crimes.
The indictment of these five defendants follows federal charges earlier this year against two other sales managers at Serra Nissan, Abdul Islam Mughal and Gerald R. Shepard. Mughal, 48, of Trussville, pleaded guilty in July to conspiring with others, including Serra Nissan salesmen, general managers, sales managers and finance managers, to sell more cars by falsifying loan documents in order to defraud customers, Nissan North America and financial institutions. Mughal also pleaded guilty to one count of bank fraud for submitting falsified loan documents to financial institutions between January 2012 and October 2013. Mughal is scheduled for sentencing May 5, 2015.
According to the indictment against the five defendants, they and other members of the conspiracy participated in various means to carry out their fraud and obtain auto loans that, otherwise, would not have been approved. Those means included the following:
• Creating or altering documents to submit to financial institutions to show inflated income for prospective buyers.
• Directing finance managers and salesmen to submit fraudulent documents to financial institutions to misrepresent proof of a customer's residency.
• Listing accessories not actually included on a vehicle so a financial institution would increase its loan amount. The defendants and others had a financial incentive to increase a loan amount in order to increase commissions paid to certain employees.
• Presenting straw buyers, who could qualify for a loan, to financial institutions when the actual buyer could not qualify.
The defendants and others also defrauded customers and financial institutions by quoting a customer an inflated monthly vehicle loan payment so that a finance manager could add a warranty and gap insurance without the customer realizing it, according to the indictment.
The maximum penalty for the conspiracy count is five years in prison and a $250,000 fine. The maximum penalty for bank fraud is 30 years in prison and a $1 million fine. The maximum penalty for wire fraud is 20 years in prison and a $250,000 fine. The minimum penalty for aggravated identity theft is 2 years in prison.
The IRS and the FBI investigated the case, which Assistant U.S. Attorney Amanda S. Wick is prosecuting.
The public is reminded that an indictment contains only charges. Defendants are presumed innocent unless and until proven guilty.
Updated March 19, 2015